Tuesday, September 14, 2010

Predictable Consequences

With memories still fresh of food riots set off by spiking prices just two years ago, agricultural experts on Friday cast a wary eye on the steep rise in the cost of wheat prompted by a Russian export ban and the questions looming over harvests in other parts of the world because of drought or flooding.

Food prices rose 5 percent globally during August, according to the United Nations, spurred mostly by the higher cost of wheat, and the first signs of unrest erupted as 10 people died in Mozambique during clashes ignited partly by a 30 percent leap in the cost of bread.

"You are dealing with an unstable situation," said Abdolreza Abbassian, an economist at the United Nation’s Food and Agriculture Organization in Rome.

"People still remember what happened a few years ago, so it is a combination of psychology and the expectation that worse may come," he added. "There are critical months ahead."